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Leverage Calculator
Calculate your leverage ratio and see how price moves amplify with leverage.
Leverage Ratio
Calculate your exposure vs equity
Margin Requirement
Know exactly how much capital you need
Risk Amplification
See how price moves affect your capital
Calculate Leverage
Enter your total position size and equity to see your leverage ratio.
How Financial Leverage Works
The Leverage Formula
Leverage = Position Size / Equity
Margin = Equity / Position Size × 100
At 10:1 leverage, a 1% price move equals a 10% change on your capital. This means a 10% adverse move would wipe out your entire equity. Understanding this multiplier effect is essential before using leveraged products.
Worked Example
You have £10,000 and open a £100,000 forex position (10:1 leverage). If the currency pair moves 2% in your favour, you gain £2,000 — a 20% return on your capital. But if it moves 2% against you, you lose £2,000 — also 20% of your capital. A 10% adverse move would result in a margin call.
Leverage Across Asset Classes
Forex & CFDs
Forex offers the highest leverage — up to 30:1 for retail traders in the EU (major pairs) and up to 500:1 with offshore brokers. CFDs on indices typically allow 20:1. Higher leverage means smaller margin requirements but amplified risk. EU regulations (ESMA) cap retail leverage to protect consumers.
Stocks & Property
Stock margin accounts typically offer 2:1 leverage. Mortgages are a form of leverage — a 10% deposit on a property is effectively 10:1 leverage. If the property rises 10%, your equity doubles. But if it falls 10%, your deposit is wiped out. Property leverage is long-term and less volatile than trading.
How to Use This Leverage Calculator
Enter Position Size
The total value of the position you want to open.
Enter Your Equity
Your available capital or margin deposit.
Review Risk
See leverage ratio and risk amplification table.
Managing Leverage Risk
- Use appropriate position sizing. Never risk more than 1-2% of your total capital on a single trade. With 10:1 leverage, a 1% risk means your stop-loss should be at 0.1% of the position value.
- Always use stop-losses. Leveraged positions can move against you quickly. A stop-loss limits your maximum loss on any single position. Without one, a gap in price can cause losses exceeding your deposit.
- Understand margin calls. Know your broker's margin call and liquidation levels. Keep sufficient free margin to absorb adverse moves without forced liquidation.
- Never risk more than you can afford. Leveraged trading can result in losses exceeding your initial deposit. Only use money you can afford to lose entirely.
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